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Richemont to Buy Net-a-Porter
By PAUL SONNE
Ltd., a transaction that signals the increasing importance high-end
consumer goods companies are assigning to online sales.
Richemont, the owner of brands such as Cartier, Montblanc and Chloe,
previously held a 33% stake in closely held Net-a-Porter, but agreed
to acquire a majority of the company from a group of private
shareholders for up to £225 million ($341 million). Richemont said the
transaction values the overall company at £350 million.
Net-a-Porter, founded in 2000 by former fashion journalist Natalie
Massenet, has been a forerunner in selling expensive designer women’s
clothes and accessories online. That is a space that was long
overlooked by big luxury goods houses like Richemont, Burberry PLC and
LVMH Moët Hennessy Louis Vuitton SA , which jumped on the online sales
bandwagon far later than their lower-priced counterparts did.
Lately, however, the big luxury brands have made digital retailing a
higher priority, having recognized that shoppers are increasingly
willing to buy very expensive products on the Web. But selling $1,000
dresses online is different from hawking groceries or second-hand
books: Customers want an editorial element, a guiding hand to replace
the in-store salesperson and signal what’s in style, which is where
Net-a-Porter has carved out its niche.
The Web site, which says it has been profitable since 2004 and
reported sales of about £120 million for the fiscal year ended Jan. 31,
has established itself as an interactive shopping fashion magazine,
publishing 52 weeks of editorial content each year alongside its
designer clothes sales operation.
“It’s just as much a magazine as it is a store,” said Ms. Massenet
in an interview. “That really has served us well, because when you’re
online you lose the offline experience of walking into a store.”
Net-a-Porter plans to expand its operation in the U.S. as the market
for luxury online retailing heats up. The company currently operates a
50,000 square foot distribution center in New York’s Long Island City,
which handles about 30% of the company’s business. CEO Mark Sebba says
Net-a-Porter intends to more than double the U.S. operation’s capacity
in the coming year and open a new distribution center in Southeast
The deal with Richemont takes away Net-a-Porter’s independence, and
some retailers selling their goods through the luxury Web vendor could
be upset that it is now owned by a competing company. But Ms. Massenet
says Richemont lets its divisions operate independently and
Net-a-Porter’s suppliers have never had a problem with the Geneva-based
company being a shareholder. Richemont first invested in Net-a-Porter
website has made designer fashion easily accessible to women around the
A year ago, Net-a-Porter launched a sister site, theOutnet.com,
which offers discounted designer clothes. The move indicated the newest
frontier in online luxury shopping: discount Web sites, some of which
luxury sector too.
Ms. Massenet held an undisclosed stake in the company she founded,
and will stay on as executive chairman.
Write to Paul Sonne at firstname.lastname@example.org
- JCTV Presents: Natalie Massenet Live Interview (jcreport.com)